To Our Shareholders
We would like to take this opportunity to express our heartfelt appreciation to you for your continued support
of PACIFIC METALS CO., LTD.
We hereby report the overview of the Group’s business for the 96th fiscal year (from April 1, 2021 to March
31, 2022).
Masayuki Aoyama
President Director & Representative Director

Company Philosophy
Leverage the power of people to deliver the earth’s resources in more useful forms and contribute to thehappiness of humankind
Company Policy
1. Integrate the management strategies of the entire Group to maximize the synergy effects of each Group
company.
2. Focus on the development and quality improvement of world-class smelting technology, and establish theworld-leading platform for management efficiency and competitiveness.
3. Promote compliance.
4. Secure appropriate profits through fair, transparent and free competition.
5. Actively tackle all environmental problems to protect the irreplaceable earth.
6. To develop the individuality of employees and fully demonstrate their creativity, pursue a sense of comfort
and affluence both physically and mentally, and realize a rewarding workplace.
7. Promote wide-ranging exchanges with society and actively disclose fair corporate information.

-1-

Note: This document has been translated from a part of the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.
(Securities Code 5541)
June 3, 2022
To Shareholders with Voting Rights:
Masayuki Aoyama
President Director & Representative
Director
PACIFIC METALS CO., LTD.
6-1, Otemachi 1-Chome, Chiyoda-ku,
Tokyo, JapanNOTICE OF CONVOCATION OF
THE 96TH ANNUAL GENERAL SHAREHOLDERS MEETING
We would like to express our appreciation for your continued support and patronage.
Please be informed that the 96th Annual General Shareholders Meeting of PACIFIC METALS CO., LTD.
(the “Company”) will be held for the purposes as described below.
If you do not attend the meeting, you may exercise your voting rights in writing or via electromagnetic means(the Internet, etc.). Please review the attached Reference Documents for the General Shareholders Meeting and,following the instructions stated in the Guide to Exercising Voting Rights on page 3 (Japanese original), exercise
your voting rights by 5:30 p.m. Japan time on Thursday, June 23, 2022.
1. Date and Time:
2. Place:

Friday, June 24, 2022 at 10:00 a.m. Japan time
Iidabashi Rainbow Building (7F) located at
11 Ichigayafunagawaramachi, Shinjuku-ku, Tokyo(For the location of the venue, please refer to the map of the venue of theGeneral Shareholders Meeting at the end of this document.)

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
96th Fiscal Year (April 1, 2021 - March 31, 2022) and results of audits of theConsolidated Financial Statements by the Accounting Auditor and the Board
of Auditors
2. Non-consolidated Financial Statements for the Company’s 96th Fiscal Year
(April 1, 2021 - March 31, 2022)
Proposals to be resolved:
Partial Amendments to the Articles of Incorporation
Proposal 1:
Election of nine (9) Directors
Proposal 2:* The reception desk at the venue is scheduled to open at 9:00 a.m.
* Consolidated Statement of Changes in Equity, Notes to Consolidated Financial Statements, Statement of
Changes in Equity and Notes to Non-consolidated Financial Statements are posted on the Company’s website
in accordance with provisions of laws and regulations as well as Article 17 of the Company’s Articles ofIncorporation and therefore are not provided in the Appendix to this Notice. If there are any revisions in the
Reference Documents for the General Shareholders Meeting, Business Report, Non-consolidated Financial
Statements and Consolidated Financial Statements, the revised versions will be posted on the Company’s
website (Japanese only).
The Company’s website:

https://www.pacific-metals.co.jp-2-Reference Documents for the General Shareholders Meeting
Proposals and References
Proposal 2:

Partial Amendments to the Articles of Incorporation

1. Reasons for amendments
The amended provisions stipulated in the proviso of Article 1 of the supplementary provisions of the “ActPartially Amending the Companies Act” (Act No. 70 of 2019) will come into force on September 1, 2022.
Accordingly, in order to prepare for the introduction of the system for electronic provision of materials forgeneral shareholders meetings, the Company proposes that the Articles of Incorporation of the Company beamended as follows.
(1) The proposed Article 17, Paragraph 1 provides that information contained in the reference documents
for the general shareholders meeting, etc. shall be provided electronically.
(2) The purpose of the proposed Article 17, Paragraph 2 is to establish a provision to limit the scope ofmatters to be included in the paper copy to be sent to shareholders who have requested it.
(3) The provisions related to the disclosure via Internet of reference materials for general shareholders
meeting and deemed provision thereof (Article 17 of the current Articles of Incorporation) will become
unnecessary and will therefore be deleted.
(4) In line with the above establishment and deletion of the provisions, supplementary provisions related
to the effective date, etc. shall be established.
2. Details of amendments
The details of the amendments to the Articles of Incorporation are as follows.
(Amended parts are underlined.)
Current Articles of Incorporation
Proposed Amendments(Disclosure via Internet of Reference Materials for
General Shareholders Meeting and Deemed
Provision Thereof)
Article 17 For
convocationofGeneral<Deleted>
Shareholders Meeting, the Company may bedeemed to have provided to its Shareholders,
information concerning matters to be stated or
expressed in reference materials for General
Shareholders Meeting, a business report, financial
statements and consolidated financial statements
by way of disclosure using the Internet inaccordance with the provisions set forth in theministerial ordinances of the Ministry of Justice.
<Newly established>(Measures for Electronic Provision, Etc.)
Article 17 For convocation of a General
Shareholders Meeting, the Company shallprovide information contained in the reference
documents for the General Shareholders
Meeting, etc. electronically.
2. Among the matters to be provided electronically,
the Company may choose not to include all orpart of the matters stipulated in the Ordinance ofthe Ministry of Justice in the paper copy to besent to shareholders who have requested it by therecord date for voting rights.

-3-

<Newly established>

Supplementary provisions
1. The deletion of Article 17 (Disclosure via
Internet of Reference Materials for General
Shareholders Meeting and Deemed Provision
Thereof) of the Articles of Incorporation prior to
the amendments and the establishment of Article
17 (Measures for Electronic Provision, Etc.) shallcome into effect on September 1, 2022.
2. Notwithstanding the provisions of the preceding
paragraph, Article 17 (Disclosure via Internet ofReference Materials for General Shareholders
Meeting and Deemed Provision Thereof) of the
Articles of Incorporation prior to theamendments shall remain in force with respect toa General Shareholders Meeting to be held on or
before February 28, 2023.
3. These supplementary provisions shall be deleted
on March 1, 2023 or on the date when threemonths have elapsed from the date of the General
Shareholders Meeting set forth in the preceding
paragraph, whichever is later.

-4-

Proposal 2:

Election of nine (9) Directors

The terms of office of all nine (9) Directors will expire at the conclusion of this year’s Annual General
Shareholders Meeting. Accordingly, the election of nine (9) Directors is proposed. The candidates are as
follows.
Details about each candidate such as career summary, reason for nomination and other information arestated on pages 7 to 14.
Term
Attendance atBoard ofNo.
Name
Genderof
Position
Responsibilities
Directors meeting
office1

Masayuki
AoyamaReappointment

Male

8
years

President Director

Representative Director
Member of Nomination andCompensation Committee

23 out of 23
meetings(100.0%)

2

Yoshiharu
Inomata

Reappointment

Male

5
years

Director & Senior
Managing Executive
Officer

Assistant to the President,
In charge of Corporate
Planning, Recycling Business23 out of 23
meetings(100.0%)3

Kenichi Hara

Reappointment

Male

4
years

Director &Managing Executive
Officer

In charge of Procurement,
General Manager of Sales &Marketing Dept.

23 out of 23
meetings(100.0%)In charge of Internal Control,
IR, General Administration,
Finance & Accounting,General Manager of
Personnel & Labor Relation
Dept.
In charge of Quality Control& Environmental
Management,
General Manager, Resources& Technology Development
Project Dept.
In charge of Safety & HealthManagement, Utility &Maintenance and Production,
General Manager of Business
Process Reengineering Dept.

23 out of 23
meetings(100.0%)

4

Terunobu
Matsuyama

Reappointment

Male

4
years

Director &Managing Executive
Officer5

HiroakiIchiyanagi

Reappointment

Male

2
years

Director & Senior
Executive Officer

6

Kazuo Iwadate

Reappointment

Male

2
years

Director & Senior
Executive Officer

7

ShinyaMatsumoto

Reappointment
OutsideIndependent

Male

9
years

Outside Director

Chairperson of Nomination
and Compensation
Committee

22 out of 23
meetings(95.7%)

8

Hikari Imai

Reappointment
OutsideIndependent

Male

6
years

Outside Director

Member of Nomination andCompensation Committee

23 out of 23
meetings(100.0%)

9

Yukari Sakai

Reappointment
OutsideIndependent

Female1year

Outside Director―

16 out of 16
meetings(100.0%)Notes:

1.
2.

23 out of 23
meetings(100.0%)23 out of 23
meetings(100.0%)Term of office, position and responsibilities are as at the time of this Annual General Shareholders Meeting.
Candidate for Director Yukari Sakai’s attendance at the Board of Directors meetings is based on the Board of
Directors meetings held after her assumption of office on June 25, 2021.

Reappointment: Candidate for Director to be reappointed
Outside: Candidate for Outside Director
Independent: Independent Director

-5-

○

2

Yoshiharu
Inomata○○3

Kenichi Hara○

4

Terunobu
Matsuyama○

5

HiroakiIchiyanagi○

6

Kazuo Iwadate○

7

ShinyaMatsumoto○8

Hikari Imai

○

○

○

9

Yukari Sakai

○

○

○

Note:

○
○
○

○
○

○

○

○
○

○

○

○

○

○

○

○

○

○

○
○

○

○
○

○

○
○

○

○
○

○
○
○

The skills matrix classifies knowledge and experience considered to be important for the Company and indicates thefields in which the Directors have appropriate expertise and the fields for which the Company has high expectationsof the Directors.

-6-⑩ESG andsustainability○⑨Globalmanagement

Masayuki
Aoyama⑥Law

1⑧Personnel and labor
relations⑦Risk management⑤Research /Development / IT

④Manufacturing

Name②Finance /Accounting

No.

①Corporate
management③Marketing

Board of Directors Skills Matrix

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1975

Joined the Company

December 2004

May 2010

Deputy General Manager, Utility &Maintenance Dept., Production Div. andManager, Electric Power Sec.
Associate General Manager, Utility &Maintenance Dept., Production Div.
General Manager, Utility & MaintenanceDept., Production Div.
Director, Pacific Energy Center Co., Ltd.

June 2011

Executive Officer, the Company

June 2014

Director, Rio Tuba Nickel Mining Corporation

June 2014
June 2014

Director, Taganito Mining Corporation
Director, the Company

June 2014

Senior Executive Officer

June 2014

General Manager, Production Div.

December 2008
April 2009

Masayuki Aoyama(December 7, 1954)

1

May 2017

Reason for nomination as
candidate for Director

Number ofshares oftheCompany
held

3,900

President & Representative Director, Pacific
Gas Center Co., Ltd.
June 2018
Managing Executive Officer
July 2019
In charge of Business Process Reengineering,
Production and Recycling Business
June 2020
President Director & Representative Director(to present)
May 2021
Member of Nomination and Compensation
Committee (to present)
The Company nominated Masayuki Aoyama as a candidate for Director because hehas experience in engaging in the creation of new ferronickel manufacturing
technologies/facilities and maintenance of existing ones and dealing in electric
power facilities, etc., and is also involved in the management of affiliates in Japanand overseas, and we determined that he has the experience and abilities suited to achief executive officer of the Company by leveraging such experience and trackrecord.

-7-

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1975
December 2004

Yoshiharu Inomata(June 6, 1954)

2

Reason for nomination as
candidate for Director

Number ofshares oftheCompany
held

Joined the Company
Deputy General Manager, Quality Control
Dept., Production Div. and Manager, Analysis
Sec.
December 2006
Deputy General Manager, Quality Control
Dept., Production Div., Manager, Quality
Assurance Sec. and Manager, Analysis Sec.
December 2007
Associate General Manager, Quality Control
Dept., Production Div., Manager, Quality
Assurance Sec. and Manager, Analysis Sec.
July 2008
General Manager, Quality Control Dept.,
Production Div., Manager, Quality Assurance
Sec. and Manager, Analysis Sec.
April 2009
General Manager, Quality Control Dept. andManager, Quality Assurance Sec.
June 2012
Executive Officer and General Manager,
Quality Control Dept.
June 2014
Senior Executive Officer
June 2014
General Manager, Quality Control Dept. andGeneral Manager, Environmental
Management Dept.
July 2016
General Manager, Quality Control &Environmental Management Dept.
September 2016
General Manager, Quality Control &4,227
Environmental Management Dept., General
Manager, Technical Research & Development
Dept. and Manager, Pyrometallurgy
Development Sec.
June 2017
Director (to present)
June 2017
In charge of Safety & Health Management,
Quality Control & Environmental
Management
June 2017
General Manager, Technical Research &Development Dept.
July 2019
In charge of Safety & Health Management andResources & Technology Development
Project
July 2019
General Manager, Quality Control &Environmental Management Dept.
June 2020
Managing Executive Officer
June 2020
In charge of Corporate Planning, Safety &Health Management, Quality Control &Environmental Management
June 2021
Senior Managing Executive Officer (topresent)
June 2021
Assistant to President (to present)
June 2021
In charge of Corporate Planning, Recycling
Business (to present)
The Company nominated Yoshiharu Inomata as a candidate for Director because
he has extensive experience in quality control, environmental management fields
and technical research & development, and we determined that he has theexperience and abilities suited to a Director who can take charge of the
management of the Company by leveraging such experience and track record.

-8-

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1988
October 2010

Kenichi Hara
(May 20, 1964)

3

Reason for nomination as
candidate for Director

Terunobu Matsuyama(December 16, 1969)

4

Reason for nomination as
candidate for Director

Number ofshares oftheCompany
held

Joined the Company
Assistant General Manager, Environment &Recycle Business Dept.
December 2011
Assistant General Manager, Ferro Nickel
Sales Dept.
December 2012
Associate General Manager, Ferro Nickel
Sales Dept.
June 2014
Executive Officer
June 2014
General Manager, Ferro Nickel Sales Dept.
2,900
June 2017
Senior Executive Officer
March 2018
Director, Pacific Sowa Corporation (topresent)
June 2018
Director (to present)
June 2018
In charge of Sales
July 2019
General Manager, Sales & Marketing Dept.
(to present)
June 2020
In charge of Procurement (to present)
June 2021
Managing Executive Officer (to present)
The Company nominated Kenichi Hara as a candidate for Director because he has
extensive experience in the sales field, and we determined that he has theexperience and abilities suited to a Director who can take charge of the
management of the Company by leveraging his past experience and track record.
April 1988
Joined the Company
December 2010
Assistant General Manager, Finance &Accounting Dept.
December 2013
Associate General Manager, Finance &Accounting Dept.
May 2014
Auditor, Pacific Gas Center Co., Ltd.
June 2014
General Manager, Finance & Accounting
Dept., the Company (to present)
June 2017
Executive Officer
June 2018
Director (to present)
3,043
June 2018
Senior Executive Officer
June 2020
In charge of IR (to present)
May 2021
Director, Taiheiyo Kosan Co., Ltd. (to present)
June 2021
Managing Executive Officer (to present)
June 2021
In charge of Internal Control (to present)
June 2021
In charge of General Administration (topresent)
June 2021
In charge of Finance & Accounting (topresent)
June 2021
General Manager of Personnel & Labor
Relation Dept. (to present)
The Company nominated Terunobu Matsuyama as a candidate for Director because
he has a wealth of knowledge in the accounting/financial fields, and we determinedthat he has the experience and abilities suited to a Director who can take charge ofthe management of the Company by leveraging such experience and track record.

-9-

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 2003
December 2009

Hiroaki Ichiyanagi(April 24, 1960)

5

Reason for nomination as
candidate for Director

Kazuo Iwadate(January 14, 1967)

6

Reason for nomination as
candidate for Director

Number ofshares oftheCompany
held

Joined the Company
Deputy General Manager, Ore Purchasing &Mining Engineering Dept.
December 2012
Associate General Manager, Ore Purchasing& Mining Engineering Dept.
June 2014
Executive Officer
June 2014
General Manager, Ore Purchasing & Mining
Engineering Dept.
June 2017
Senior Executive Officer (to present)
1,500
June 2018
Director, Rio Tuba Nickel Mining Corporation(to present)
June 2018
Director, Taganito Mining Corporation (topresent)
July 2019
General Manager, Resources & Technology
Development Project Dept., the Company (topresent)
June 2020
Director (to present)
June 2021
In charge of Quality Control & Environmental
Management (to present)
The Company nominated Hiroaki Ichiyanagi as a candidate for Director because hehas a wealth of knowledge in the ore procurement and overseas resources
development fields, and is also involved in the management of overseas affiliates,
and we determined that he has the experience and abilities suited to a Director who
can take charge of the management of the Company by leveraging such experienceand track record.
April 1985
Joined the Company
December 2009
Deputy General Manager, Production Dept.,
Production Div.
December 2012
General Manager, Production Dept.,
Production Div.
November 2015
General Manager, Production Dept. andGeneral Manager, Environmental Business
Dept., Production Div.
June 2017
Executive Officer
June 2017
Assistant General Manager, Production Div.,
General Manager, Utility & MaintenanceDept. and General Manager, Environmental
1,251
Business Dept.
July 2019
General Manager, Business Process
Reengineering Dept. (to present)
May 2020
President & Representative Director, Pacific
Gas Center Co., Ltd. (to present)
June 2020
Director (to present)
June 2020
Senior Executive Officer (to present)
June 2020
In charge of Utility & Maintenance andProduction (to present)
June 2021
In charge of Safety & Health Management (topresent)
The Company nominated Kazuo Iwadate as a candidate for Director because hehas extensive experience in the production and maintenance fields, and wedetermined that he has the experience and abilities suited to a Director who cantake charge of the management of the Company by leveraging his past experienceand track record.

- 10 -

No.

Name(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1987

[Candidate for Outside
Director]
Shinya Matsumoto(August 12, 1959)

7

Reason for nomination as
candidate for Outside
Director and expected roles[Candidate for Outside
Director]
Hikari Imai
(July 23, 1949)

8

Reason for nomination as
candidate for Outside
Director and expected roles

Number ofshares oftheCompany
held

Registered as attorney, joined Marunouchi
Sogo Law Office
July 1996
Partner and attorney
June 2001
Outside Corporate Auditor, Impress
Corporation (now Impress Holdings, Inc.)(to present)
June 2006
Member of Special Committee, theCompany0June 2007
Outside Director, The Shibusawa Warehouse
Co., Ltd. (to present)
October 2011
Partner and Representative Attorney,
Marunouchi Sogo Law Office (to present)
June 2013
Outside Director, the Company (to present)
May 2021
Chairperson of Nomination andCompensation Committee, the Company (topresent)
The Company nominated Shinya Matsumoto as a candidate for Outside Director
because we determined that he is capable of properly performing his duties as
Outside Director based on his professional perspective and broad insight as an
attorney. We expect him to promote the enhancement of compliance andimprovement of corporate governance at the Company by leveraging the abovementioned perspective and insight.
April 1974
Joined Yamaichi Securities Co., Ltd.
January 1986
Joined Morgan Stanley Japan Securities Co.,Ltd.
April 1993
Joined Merrill Lynch Japan Incorporated
January 1999
Deputy Chairman, and Chairman, Investment
Banking Division, Merrill Lynch Japan
Securities Co., Ltd
November 2007
Vice-President and Director, RECOF
Corporation
0
April 2008
President
July 2010
Advisor, Ebara Foods Industry, Inc.
April 2012
Outside Director, Olympus Corporation
June 2015
Outside Director, CYBERDYNE Inc. (topresent)
June 2016
Outside Director, the Company (to present)
November 2019
Outside Director, SHIMACHU CO., LTD.
May 2021
Member of Nomination and Compensation
Committee, the Company (to present)
The Company nominated Hikari Imai as a candidate for Outside Director because
we determined that he is capable of properly performing his duties as Outside
Director based on his extensive experience as a corporate manager over many
years. We expect him to promote the improvement of corporate governance and theenhancement of the foundation of corporate management at the Company byleveraging the above-mentioned experience.

- 11 -

Name(Date of birth)

No.

Career summary, positions, responsibilities
and significant concurrent positions

Number ofshares oftheCompany
held

Joined Nomura Securities Co., Ltd.
Director of Corporate Tune Co., Ltd.
Standing Outside Audit and Supervisory
Board Member of UNITED ARROWS LTD.
June 2008
Outside Auditor of REPROCELL Inc.
September 2013
Outside Auditor of Beauty Kadan Co., Ltd.
June 2016
Outside Director (Standing Audit and0
Supervisory Committee Member) of UNITED
ARROWS LTD. (to present)
October 2017
Outside Director (Audit and Supervisory
Committee Member) of Tea Life Co., Ltd.
March 2019
External Director (Audit & Supervisory Board
Member) of Uzabase, Inc. (to present)
June 2021
Outside Director, the Company (to present)
The Company nominated Yukari Sakai as a candidate for Outside Director because
we determined that she is capable of properly performing her duties as Outside
Director based on her extensive experience as a corporate manager in a wide rangeof business fields. We expect her to promote the enhancement and reinforcement ofcorporate governance at the Company based on a variety of perspectives from theviewpoint of diversity, by leveraging the above-mentioned experience.

April 1991
January 2005
June 2005[Candidate for Outside
Director]
Yukari Sakai(June 23, 1968)

9

Reason for nomination as
candidate for Outside
Director and expected roles

Notes:

1.
2.

3.

4.

There are no special interests between each candidate and the Company.
Contract for limited liability with Directors
The Company has entered into a contract for limited liability with each of the candidates for Directors Mr. Shinya
Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai pursuant to the provisions of Article 427, Paragraph 1 of theCompanies Act and Article 30 of the Articles of Incorporation, and plans to continue the said contract subject to theapproval of their reappointment.
The gist of the said contract for limited liability is that the liability referred to in Article 423, Paragraph 1 of theCompanies Act shall be limited to the amount provided for in laws and regulations when the three Directors haveacted in good faith and without gross negligence in performing their duties as Directors.
Directors and officers liability insurance contract with Directors
The Company has entered into a directors and officers liability insurance contract with an insurance company tocover damages and litigation expenses to be borne by the insureds, in the event of a claim for damages arising fromthe insured’s conduct (including omissions) in the course of their duties as directors and officers of the Company.
The candidates for Director will be insured under the relevant insurance contract. The contract is scheduled to be
renewed with the same terms and conditions at the next renewal.
Matters concerning Outside Directors are as follows.
(1) Candidates Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai are candidates for Outside Directors
provided for in Article 2, Paragraph 3 (vii) of the Ordinance for Enforcement of the Companies Act.
The Company has designated Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai as Independent
Directors pursuant to the regulations set forth by the Tokyo Stock Exchange and submitted a notification of
their designation to the said exchange.
(2) Number of years served as Outside Directors by candidates for Outside Directors since their appointment(i) Mr. Shinya Matsumoto will have served as Outside Director of the Company for nine years at the conclusionof this Annual General Shareholders Meeting.
(ii) Mr. Hikari Imai will have served as Outside Director of the Company for six years at the conclusion of thisAnnual General Shareholders Meeting.
(iii) Ms. Yukari Sakai will have served as Outside Director of the Company for one year at the conclusion ofthis Annual General Shareholders Meeting.
(3) Candidates Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai have never been Executives orOfficers (excluding those who are Executives) of a Specified Associated Service Provider (Article 2, Paragraph
3 (xix) of the Ordinance for Enforcement of the Companies Act) of the Company over the past ten years.
(4) Candidates Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai each have held office as a directorof other stock companies over the past five years, and there are no circumstances indicating unfair execution ofbusiness during their terms of office at these companies.

- 12 -

<Reference>●Criteria for determining independence of independent officers
The Company has established the criteria for determining independence of its independent officers as follows.
1. An independent officer shall be an Outside Director or an Outside Auditor with no risk of conflict of interest
arising with general shareholders.
2. An independent officer shall not be a major business partner (supplier or buyer) of the Company or a director,
executive or auditor thereof.
3. An independent officer shall not be a consultant, attorney, certified public accountant, certified tax accountant,etc. to whom the Company pays annual compensation amounting to one million yen or more other than officer’s
compensation.
4. An independent officer shall not be a shareholder of the Company.
5. An independent officer shall not be a friend of a Director or Auditor of the Company.
6. An independent officer shall not formerly or currently be:(1) A director, executive, auditor or accounting advisor of the Company or the Company’s subsidiaries, etc.;(2) A shareholder who holds 5% or more of the Company’s shares or a director, executive or auditor of an
institutional shareholder who holds 5% or more of the Company’s shares;(3) A director, executive or auditor of the parent company of the shareholder referred to in paragraph (2) above;(4) A member of a corporation organized by a consultant, attorney, certified public accountant, certified tax
accountant, etc. to whom the Company pays annual compensation amounting to one million yen or moreother than officer’s compensation;(5) A major business partner (supplier or buyer) of the Company or a former member of such client other thandirector, executive or auditor thereof;(6) A shareholder who holds 5% or more of the Company’s shares or a former member of an institutional
shareholder who holds 5% or more of the Company’s shares other than director, executive or auditor thereof;(7) A former member of the parent company of the shareholder referred to in paragraph (6) above other thandirector, executive or auditor of such parent company;(8) A member of a company whose relationship with the Company involves having outside officers from bothparties;(9) A recipient of donations from the Company or a former member thereof; or(10) A relative within third degree of kinship to any of the aforementioned persons.

- 13 -

●Board of Auditors Skills Matrix
Name

GenderTerm of office

Kiichi TatsunakaMale

19 yearsKen Yasuda

Male

4 years

Hideki OgataMale

3 years

Shuzo Ikeda

Male

2 years

Position

Permanent
AuditorOutsideAuditorOutsideAuditorOutsideAuditor①Corporate
management②Finance /Accounting③Audit

④Law

○

○
○
○
○

○
○
○
○

○
○
○
○

Notes: 1. The skills matrix classifies knowledge and experience considered to be important for the Company and indicates thefields in which the Auditors have appropriate expertise and the fields for which the Company has high expectations of
the Auditors.
2. Term of office and position are as at the time of this Annual General Shareholders Meeting.

[End of document]- 14 -

(Appendix)

Business Report(April 1, 2021 - March 31, 2022)

1. Overview of the Corporate Group(1)

Business Progress and Results
During the fiscal year ended March 31, 2022, the Japanese economy was somewhat lackluster. The
gradual easing of restrictions and other measures imposed to mitigate the impact of COVID-19 led to a
pickup in corporate earnings and other factors, but some weakness remained due to the impact of COVID19, and uncertainty increased as the situation in Ukraine became more tense.
As for overseas economies, while there were signs of recovery in the employment and income
environment, partly due to economic stimulus measures aimed at economic normalization and the progressin vaccinations, the outlook remained uncertain due to concerns about the resurgence of COVID-19, thedevelopment of trade policies between the U.S. and China, financial and capital market fluctuations, and theimpact of the tense situation in Ukraine.
Under these circumstances, in the stainless steel industry, the primary source of demand for the nickel
business that accounts for the majority of the Group’s sales and profit and loss, capacity utilization of
production facilities remained firm in general. This is because demand picked up in line with trends towards
the normalization of economic activities, although a sense of uncertainty remained over the impacts of
COVID-19 trend, the electric power regulation issue in China, and other factors.
As a result, the demand for ferronickel continued to recover to a certain extent.
As for the procurement of nickel ore, the primary raw material for ferronickel products, mining
companies’ operations and shipments were generally stable, which allowed us to procure the volume
sufficient to meet our production and sales. In addition, nickel ore prices have remained high against the
backdrop of the impact of the Indonesia’s unprocessed ore export ban and a robust demand for stainless steel,which resulted in higher production costs.
Nickel prices on the London Metal Exchange (LME) showed a temporary adjustment phase due to thecontinuation of the impact of financial and capital market fluctuations and unstable prices of crude oil andother commodities, as well as the major debt problem of the real estate conglomerate and the electric power
regulation issues in China. Then, the prices trended upward due to the growing resumption of economic
activities that had been restricted by the COVID-19 pandemic and against the backdrop of a sense of
expectation for accelerated vaccination efforts. However, nickel prices spiked in the fourth quarter due toconcerns over nickel supply triggered by the tense situation in Ukraine and other factors, and trading was
temporarily suspended because of the market turmoil, and although trading resumed toward the end of theyear, uncertainty remained.
In this situation, the Company’s ferronickel sales volume increased by 30.1% year on year due to anincrease in both domestic and overseas sales against the backdrop of the aforementioned environment in thestainless steel industry, despite a partial shift in raw material procurement by overseas stainless steel
producers to nickel pig iron and other materials that are more price competitive.
The ferronickel production volume increased, generally following the same trend as the sales volume.
Amid continued responses to the increasingly uncertain business environment, the selling price offerronickel products increased as the LME nickel price applicable to the Company increased by 33.8% year
on year and the average exchange rate of Japanese yen applicable to the Company was 6.1% weaker year on
year.
In this business environment characterized by continued uncertainty, the Group has strived to prevent
infections by formulating the Behavioral Guidelines for Preventing the Spread of Infections, making efforts
to reduce the COVID-19 impact on business activities while maintaining timely and appropriate
communications with its customers and procurement partners across the world. Although the COVID-19
pandemic is expected to continue, the Company continues to implement these measures in response to thebusiness environment. To further strengthen its earnings base, the Company is striving to reduce total cost
- 15 -

through energy conservation and low-cost production, strengthen facilities to build an optimal production
system, work toward long-term and stable procurement of ore, and thoroughly focus on the profitability oforders, thereby building a flexible production and sales system. Furthermore, the Company continues its
efforts to improve business performance and stabilize earnings through measures such as the early realizationof overseas business development and new mine development as well as reinforcement of operational
efficiency improvement measures to pursue cost minimization.
The ferronickel manufacturing facility’s electric furnace molten material leakage incident that occurredjust before the end of the fiscal year did not have an impact on the sales volume in the fiscal year underreview and had only a minor impact on the production volume and business performance. On the other hand,
the restoration of the one affected unit of the production facilities is scheduled for the third quarter of thenext fiscal year in view of the lengthy delivery period for parts and materials due to recent supply chain
disruptions and other factors.
As a result, consolidated net sales for the fiscal year under review increased by 77.3% year on year to¥57,129 million. On the profit front, operating profit was ¥4,806 million (compared with operating loss of¥493 million for the previous fiscal year), ordinary profit, reflecting the recording of ¥6,483 million in shareof profit of entities accounted for using equity method under non-operating income increased by 288.6%
year on year to ¥12,999 million. Profit attributable to owners of the parent increased by 877.8% year on yearto ¥11,368 million.
Operating results by business segment are as follows.
(Nickel business)
The operating results of the nickel business are as described above.
As a result, net sales in this segment increased 85.2%year on year to ¥56,338 million, and operating profit
was ¥4,950 million (compared with operating loss of ¥567 million for the previous fiscal year).
(Gas business)
In the gas business, the Company maintained a stable operation, but this segment recorded a loss due
partly to increased costs associated with facility repair.
As a result, net sales in this segment decreased by 6.6% year on year to ¥576 million with operating lossof ¥10 million (compared with operating profit of ¥21 million for the previous fiscal year).
(Other)
The segment of other businesses recorded a loss. The real estate business recorded sales of land but thepositive impact was limited, and the waste recycling business’s order-taking was sluggish.
As a result, net sales in this segment decreased by 74.7% year on year to ¥324 million with operating lossof ¥142 million (compared with operating profit of ¥43 million for the previous fiscal year).

- 16 -

Net sales by business segment

Segment

95th Term
Year ended March 31, 2021
AmountShare

96th Term
Year ended March 31, 2022
AmountShare

ChangeAmountShare(Million yen)%

(Million yen)%

(Million yen)

30,41994.4

56,33898.6

25,919

85.2

617
1,283

1.9
4.0

576
324

1.0
0.6

(40)
(958)

(6.6)
(74.7)(103)
32,217

(0.3)
100.0

(109)
57,129

(0.2)
100.0

(6)
24,912—
77.3

Nickelbusiness
Gas business
Other
Inter-segment
eliminations
Total

%

Operating profit (loss) by business segment

Segment

95th Term
Year ended March 31, 2021
AmountShare

96th Term
Year ended March 31, 2022
AmountShare

ChangeAmountShare(Million yen)%

(Million yen)%

(Million yen)

%

(567)

115.1

4,950

103.0

5,518

—

21
43

(4.4)
(8.8)

(10)
(142)

(0.2)
(3.0)

(31)
(186)

—
—

9
(493)

(1.9)
100.0

9
4,806

0.2
100.0

(0)
5,300

—
—

Nickelbusiness
Gas business
Other
Inter-segment
eliminations
Total(2) Issues to Be Addressed
1) Future Outlook

With regard to the consolidated financial forecast, the economic outlook remains highly uncertain as
COVID-19 and the situation in Ukraine continue to affect the domestic and overseas economies.
On the volume front, the sales environment is firm. However, near the end of the fiscal year under review,
during repair of one of the three electric furnaces, which are part of the ferronickel manufacturing facilities,
molten materials remaining in the furnace leaked out of the furnace. Operation of this electric furnace has
been suspended and the restoration of the furnace is scheduled for the third quarter of the next fiscal year.
Therefore, the production and sales volumes are expected to decrease.
On the selling price front, demand for nickel is expected to remain robust in view of the recovery trendof the economies of various countries. The market is attracting a great deal of attention owing to complex
factors associated with the tension in Ukraine. The LME nickel price applicable to the Company, which isused as an indicator for determining the selling price of the Company’s ferronickel products, is expected toremain unstable.
On the procurement front, production costs are expected to be affected by higher prices of nickel ore,fuels, and other raw materials, but the volume of nickel ore sufficient to meet production needs will be
secured.
Although the impacts of COVID-19 and the situation in Ukraine are expected to continue in the next
fiscal year, response measures to address such business environment are consistent with activities to beundertaken under the basic policies set forth in the Group’s Medium-term Management Plan, and theCompany will continue to strongly push forward with these measures.
2) New Medium-Term Business Plan “PAMCO-2024”
In order to establish a management platform capable of responding to changes in the businessenvironment and to achieve continuous growth, we established the long-term vision, “Become a world-classferronickel manufacturer with comprehensive power,” and endeavored to achieve this long-term vision.
- 17 -

However, the business environment surrounding the Company has become increasingly severe due to thematerialization of resource nationalism in the nickel ore-producing countries, changes in the market structureof mainstay products, and other factors. The situation is unpredictable due to soaring resource and energy
prices, etc., caused by the tense situation in Ukraine.
In this business environment, having positioned further strengthening of the platform, contributing to theSDGs, and becoming carbon neutral as important issues for the Company, we aim to evolve as a sustainable
company by building and developing a business structure based on problem-solving.
Based on the above, we have set forth a new long-term vision, “A comprehensive materials company thatco-creates a sustainable, recycling-oriented society,” and have formulated a new medium-term business plan
covering the period from FY2022 to FY2024 (hereinafter, PAMCO-2024) to realize this vision.
(1) Long-term vision: “A comprehensive materials company that co-creates a sustainable, recyclingoriented society”(2) Theme of PAMCO-2024: “Further strengthen the platform and promote the sustainability strategy”(3) Materiality and Priority Measures (1) to 9))—Contribute to the achievement of the SDGs through the resolution of material issues—
Restructuring of ferronickel production and sales systems with emphasis on profitability
1) Establishment of optimal production system by reviewing production strategy
2) Strengthening of cost competitiveness by reviewing procurement strategy
Acceleration of consideration of expansion into overseas smelting business3) Promotion of overseas smelting projects and start-up of production
Creation of new businesses that contribute to society4) Promotion of production and sales of raw materials for LIB materials
Diversification of business in Japan to contribute to a recycling-oriented society5) Restructuring of recycling business
Enhancement of corporate value by addressing sustainability issues6) Sustainability Promotion Council—Promotion of medium- and long-term initiatives related to material sustainability issues—7) Reduction of GHG emissions
8) Promotion of symbiosis by contributing to the development of regions and resource-richcountries
9) Promotion of constructive dialogue with stakeholders
For details, please also refer to our website (Medium-term Management Plan).
(https://www.pacific-metals.co.jp/ir/term.php)
We would like to ask for the continued support and encouragement of our shareholders.
(3)

Capital Expenditures, Etc. and Financing
The total amount of capital expenditures conducted in the fiscal year under review was ¥686 million.
The Company did not conduct any financing at the end of the fiscal year under review.

(4)

Transfer, Absorption-type Split or Incorporation-type Split of Businesses
Not applicable.

(5)

Acquisition of Business from Other Companies
Not applicable.

(6)

Succession of Rights and Obligations regarding Businesses of Other Corporations via Absorptiontype Merger or Absorption-type Split
Not applicable.

(7)

Acquisition or Disposition of Shares and Other Equity or Share Acquisition Rights of Other- 18 -

Corporations
Not applicable.
(8)

Trends in Assets and Profit (Loss)

Item

Net sales
Ordinary profit
Profit attributable to ownersof parent
Basic earnings per share(yen)
Total assets
Net assets
Net assets per share (yen)93rd Term
Year ended
March 31,2019

(Million yen)
96th Term
Year ended
March 31,2022

94th Term
Year ended
March 31,2020

95th Term
Year ended
March 31,2021

49,062
3,451

44,133972

32,217
3,344

57,12912,999

3,693

625

1,162

11,368189.37 yen

32.06 yen

59.61 yen

582.93 yen

71,93364,4393,291.66 yen

69,96063,506
3,242.70 yen

75,48467,014
3,421.84 yen

89,85280,153
4,095.12 yen(Fiscal year
under review)Notes: 1. Basic earnings (loss) per share is calculated based on the average number of shares issued andoutstanding during the fiscal year, while net assets per share are calculated based on the number ofshares issued and outstanding at the end of the fiscal year. Treasury shares are excluded from the total
number of shares issued and outstanding.
2. The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020), etc. effective from the beginning of the fiscal year under review. In “Trends in Assets
and Profit (Loss)” figures after application of the said accounting standards, etc. are presented.

(9)Significant Subsidiaries

Company name

Capital(Thousand yen)

The Company’s
share of voting
rightsMajor business lines%

Taiheiyo Kosan Co., Ltd.

50,000

74.00

Pacific Gas Center Co., Ltd.

100,000

50.00

Transportation andcontracting, realestate-related
business, etc.
Manufacture and saleof gases

Notes: 1. The Company has two (2) consolidated subsidiaries and seven (7) associates accounted for using theequity method.
2. An overview of their business results for the fiscal year under review is stated above in “(1) Business
Progress and Results” (Pages 15-16).

(10) Principal Business (as of March 31, 2022)
Business segment
Major business lines
Nickel business
Manufacture and sale of ferronickel and slag products
Gas business
Manufacture and sale of gases
Other
Waste recycling business, transportation and contracting, real estaterelated business, etc.

- 19 -

(11) Principal Business Locations (as of March 31, 2022)
1) The Company
Business location nameHead Office
Chiyoda-ku, Tokyo
Hachinohe Head Office
Hachinohe City, Aomori2) Significant subsidiaries
Business location nameTaiheiyo Kosan Co., Ltd.
Hachinohe City, Aomori
Pacific Gas Center Co., Ltd. Hachinohe City, Aomori

Location

Location(12) Employees (as of March 31, 2022)
Number of employees
460

Year-on-year increase (decrease)2(13) Major Lenders (as of March 31, 2022)
Not applicable.

- 20 -

2. Shares of the Company (as of March 31, 2022)(1) Total number of shares authorized to be issued

50,000,000 shares(2) Total number of shares issued and outstanding

19,502,730 shares(excluding 74,341 treasury shares)
14,422 persons (up 317 from the end of theprevious fiscal year)(3) Number of shareholders(4) Major shareholders (top ten shareholders)Number of shares
held
Thousand shares

Shareholder’s name

Percentage ofshareholding%

The Master Trust Bank of Japan, Ltd. (Trust account)

4,773

24.47

NIPPON STEEL Stainless Steel Corporation

2,049

10.51

Custody Bank of Japan, Ltd. (Trust account)

1,586

8.14

STATE STREET BANK AND TRUST COMPANY
505103997

5.11

BBH FOR FIDELITY PURITAN TR: FIDELITY SR
INTRINSIC OPPORTUNITIES FUND

890

4.57

Tachibana Securities Co., Ltd.

662

3.40

RBC IST 15 PCT LENDING ACCOUNT - CLIENT
ACCOUNT

349

1.79

J.P. MORGAN SECURITIES PLC FOR AND ON
BEHALF OF ITS CLIENTS JPMSP RE CLIENTASSETS-SEGR ACCT

326

1.67

Matsui Securities Co., Ltd.

205

1.06

Business Partners’ Shareholding Association, PACIFICMETALS CO., LTD.

196

1.00

Notes: 1. Numbers of shares held have been rounded down to the nearest thousand.
2. Percentage of shareholding has been calculated based on the number of shares (19,502,730
shares) obtained by subtracting treasury shares from the total number of shares issued andoutstanding.

(5) Other important matters concerning shares
Not applicable.
(6) Distribution of shareholdings by owner- 21 -

3. Share Acquisition Rights, etc., of the Company (as of March 31, 2022)(1)

Status of share acquisition rights, etc. held by the officers of the Company that are issued asremuneration for the execution of duties
Not applicable.

(2)

Status of share acquisition rights, etc. issued to employees of the Company as remuneration for
the execution of duties during the fiscal year under review
Not applicable.

(3)

Other significant matters concerning share acquisition rights, etc.
Not applicable.

- 22 -

4. Company Officers(1)

Directors and Auditors (as of March 31, 2022)
Position

Name

President Director

Masayuki Aoyama

Director & Senior
Managing Executive
Officer

Yoshiharu Inomata

Director & Managing
Executive Officer

Kenichi Hara

Director & Managing

Terunobu

Executive Officer

Matsuyama

Director & Senior

HiroakiExecutive Officer

Ichiyanagi

Director & Senior
Executive Officer

Director

Kazuo Iwadate

ShinyaMatsumotoResponsibilities and significant concurrent positions
Representative Director, Member of Nomination andCompensation Committee
Assistant to the President,
In charge of Corporate Planning, Recycling BusinessIn charge of Procurement, General Manager of Sales &Marketing Dept.
Director, Pacific Sowa Corporation
In charge of Internal Control, IR, General Administration,
Finance & Accounting, General Manager of Personnel &Labor Relation Dept.
Director, Taiheiyo Kosan Co., Ltd.
In charge of Quality Control & Environmental
Management, General Manager, Resources & Technology
Development Project Dept.
Director, Rio Tuba Nickel Mining Corporation
Director, Taganito Mining Corporation
In charge of Safety & Health Management, Utility &Maintenance and Production; General Manager ofBusiness Process Reengineering Dept.
President & Representative Director, Pacific Gas Center
Co., Ltd.
Chairperson of Nomination and Compensation Committee
Outside Auditor, Impress Holdings, Inc.
Outside Director, The Shibusawa Warehouse Co., Ltd.
Partner and Representative Attorney, Marunouchi Sogo
Law OfficeDirector

Hikari Imai

Member of Nomination and Compensation Committee
Outside Director, CYBERDYNE Inc.

Director

Yukari Sakai

Outside Director (Standing Audit and Supervisory
Committee Member), UNITED ARROWS LTD.

Permanent Auditor

Kiichi Tatsunaka

AuditorKen Yasuda

Auditor

Hideki Ogata

AuditorShuzo Ikeda

External Auditor, NIHON PLAST CO., LTD.

Notes: 1. At the conclusion of the Annual General Shareholders Meeting on June 25, 2021, Director Mr. Tamaki Fujiyama
retired from his position due to the expiry of his term.
2. At the Annual General Shareholders Meeting on June 25, 2021, Ms. Yukari Sakai was newly elected as Director
and assumed office.
3. Messrs. Shinya Matsumoto and Hikari Imai and Ms. Yukari Sakai are Outside Directors as set forth in Article 2,
Item 15 of the Companies Act. Furthermore, the Company has designated Messrs. Shinya Matsumoto and Hikari
Imai and Ms. Yukari Sakai as Independent Directors pursuant to the regulations set forth by the Tokyo Stock
Exchange and submitted a notification of their designation to the said exchange.
4. Messrs. Ken Yasuda, Hideki Ogata, and Shuzo Ikeda are Outside Auditors as set forth in Article 2, Paragraph 16
and Article 335, Paragraph 3 of the Companies Act. Furthermore, the Company has designated Auditors Messrs.

- 23 -

Ken Yasuda, Hideki Ogata, and Shuzo Ikeda as Independent Auditors pursuant to the regulations set forth by the
Tokyo Stock Exchange and submitted a notification of their designation to the said exchange.
5. Prior to his assumption of office as Auditor, Permanent Auditor Mr. Kiichi Tatsunaka belonged to the Finance &Accounting Department of the Company, and he possesses considerable knowledge in the finance and accounting
fields.
6. Auditors Messrs. Ken Yasuda, Hideki Ogata, and Shuzo Ikeda all hail from financial institutions and possess
considerable knowledge in the finance and accounting fields and also as auditors.

Reference: The other Executive Officers are as follows. (As of March 31, 2022)
Position

Names

Senior Executive Officers

Chitaru Okamura, Satoshi Kawabata

Executive Officers

Tomoyuki Matsumura, Tetsushi Kimura(2)

Summary of Agreement on Limitation of Liability
The Company and two (2) Outside Directors and three (3) Outside Auditors have entered into
contracts to limit liability for damages pursuant to the respective provisions of Article 427, Paragraph
1 of the Companies Act, Article 30 of the Articles of Incorporation, which stipulates the contract tolimit liability of Outside Directors, and Article 39 of the Articles of Incorporation, which stipulates
the contract to limit liability of Outside Auditors. The limit of liability for damages under the said
contracts shall be the amount provided for by laws and regulations.

(3)

Summary of Directors and Officers Liability Insurance Contract
The Company has entered into a directors and officers liability insurance contract stipulated in
Article 430-3, Paragraph 1 of the Companies Act with an insurance company. Directors, Auditors,
Executive Officers, and managerial employees of the Company are within the scope of the insured
under the said insurance contract, and the insured do not bear the premiums. The said insurance
contract covers legal expenses and damages for claims brought against the insured during theinsurance period.
However, in order to ensure that the insured’s execution of their duties is not impaired, there arecertain exemptions, such as coverage not being provided for damages arising from an act committed
by the insured with knowledge that the act was in violation of the law.

(4)

Remuneration, etc. of Directors and Auditors in the Fiscal Year Under Review
1) Matters regarding the policy for determining the content of remuneration for individual
Directors and Auditors
The Company’s Nomination and Compensation Committee has established the policy described
below for determining the content of remuneration for individual Directors. This basic policy has
been decided by the Company’s Board of Directors as the Officers’ Remuneration Rules.
The Company’s policy for determining the content of remuneration for individual Auditors
has also been decided by the Company’s Board of Directors as the Officers’ Remuneration Rules,
and the maximum amount was resolved at the General Shareholders Meeting and the details are
determined through mutual consultation among the Auditors.
2) Summary of the determination policyi) Basic policy
The basic policy for Director’s remuneration is to link the remuneration system with the benefitsof shareholders in order to make the system fully functional, as an incentive to pursue thesustainable improvement of corporate value, and to determine the individual Director’s
remuneration at an appropriate level according to his/her responsibilities.
Specifically, Directors’ remuneration consists of “basic remuneration for officers” as fixed
remuneration and “bonuses for officers (cash and shares)” as performance-linked remuneration.
Regarding Outside Directors who assume the responsibility of oversight, only “basic
remuneration for officers” is paid in light of their duties.
ii) Policy for determining the amounts of basic remuneration (monetary compensation) for individual
Directors (including policy regarding the determination of the timing or conditions of granting
remuneration)- 24 -

Basic remuneration for Directors of the Company is fixed monthly remuneration and its amountis deliberated and determined by the Nomination and Compensation Committee.
iii) Policy for determining the contents and the amount or quantity of performance-linked remuneration(including policy regarding the determination of the timing or conditions of granting remuneration)
Regarding performance benchmark, performance-linked remuneration is payable when
dividends are paid. Using net income as the source of funds, performance-linked remuneration
is calculated based on the distribution standard according to the level of net income determined
separately. The performance benchmark is selected to raise awareness of the performance
improvement for each fiscal year, contribute to the improvement of corporate value, and sharebenefits with all stakeholders.
The payment is made at a fixed time each year in an amount calculated based on theperformance for each fiscal year as a bonus.
iv) Policy for determining the amount of monetary remuneration and the amount of performance-linked
remuneration as percentages of the amount of remuneration for individual Directors
a. Fixed monthly remuneration◇Basic remuneration for officers
 Fixed remuneration in cash according to the position based on the degree of responsibilities
b. Performance-linked remuneration◇Bonuses for officers (cash) Performance-linked remuneration as a short-term incentive, which fluctuates based on the
Company’s business performance during a fiscal year.
 Up to the amounts of individual monthly fixed remuneration for five months
 The payment of remuneration shall be made annually after the determination of theCompany’s performance and other items for each fiscal year.
◇Bonuses for officers (shares) As performance-linked stock remuneration, points will be granted for delivery of shares
during the term of office in order to promote the sharing of benefits and risks withshareholders from a medium- to long-term perspective.
 Shares, etc. will be issued to Directors at the time of their retirement.
Regarding the ratio by remuneration type, the ratio of fixed remuneration to performance-linked
remuneration is in the range between 10:0 and 7:3.
v) Matters relating to the determination of the content of remuneration for Directors
In determining a draft proposal on monthly individual Directors’ remuneration, the Director
President carefully evaluates the role expected of each Director by the Company, submits thedraft proposal to the Nomination and Compensation Committee, which deliberates anddetermines remuneration for individual Directors, and then the Director President submits the
proposal on the total amount to the Board of Directors, which makes a decision.
The total amount of bonuses for Directors, which are performance-linked remuneration, isdetermined in accordance with the distribution standards, and the Director President submits a
proposal on the total amount to be paid to the Board of Directors, which makes a decision.
Distribution to individuals is done proportionally based on the amount of fixed monthly
remuneration according to position.
3) Matters regarding the resolution of the General Meeting of Shareholders concerning
remuneration of Directors and Auditors
The 80th Annual General Shareholders Meeting on June 29, 2006 passed a resolution to stipulatethat the amount of monetary remuneration for Directors shall be up to 350 million yen per year
(excluding the portion of employee salary of Directors who concurrently serve as employees).
There were ten (10) directors (including one (1) Outside Director) at the time of the conclusionof the said Annual General Shareholders Meeting.
The 80th Annual General Shareholders Meeting on June 29, 2006 passed a resolution to
stipulate that the amount of monetary remuneration for Auditors shall be up to 60 million yen per
year. There were four (4) auditors at the time of the conclusion of the said Annual General
Shareholders Meeting.
4) Matters regarding the entrustment of the determination of remuneration, etc. for individual
Directors
Regarding the amount of each individual Director’s remuneration, the maximum amount
was resolved at the General Shareholders Meeting, and the Nomination and Compensation
Committee, entrusted by the Board of Directors, deliberates on the total amount of
remuneration to be paid to Directors for the applicable period based on the Directors’
Remuneration Policy established separately, and the President submits the proposal- 25 -

reflecting results of its deliberations to the Board of Directors, which makes a decision.
The reason for delegating authority to the Nomination and Compensation Committee isto ensure the fairness, transparency, and objectivity of the procedures for determining
remuneration since the Nomination and Compensation Committee, of which a majority ofmembers are Outside Directors, is a voluntary advisory body to the Board of Directors of
the Company.
The Board of Directors has taken measures to ensure that such authority is properly
exercised by the Nomination and Compensation Committee, which deliberates on the matter
and, based on its report, the Director President submits the matter to the Board of Directors
for decision. Since the amount of individual Director’s remuneration is determined throughsuch procedures, the Board of Directors believes that the content of such remuneration is inline with the determination policy.
Regarding the details pertaining to the fiscal year under review, the Nomination andCompensation Committee (Chairperson: Outside Director Mr. Shinya Matsumoto;
Members: Director President Mr. Masayuki Aoyama, Outside Director Mr. Hikaru Imai)determined the details of remuneration for individual Directors. The content of its authority
is defined by the Committee’s Regulations and covers formulation of the basic policy
regarding the remuneration system, proposals on the remuneration framework (including
the calculation method), and specific amounts of remuneration for individual Directors(including the calculation method).
4) Total amount of remuneration, etc. of Directors and Auditors

Officer Category

Total amountof
remuneration,etc.
(million yen)

Total amount by remuneration type (million yen)
PerformanceNon-monetary
Basic (fixed)
linkedremuneration,
remuneration
remuneration,
etc.
etc.

Number of
eligible
officers

Directors (of
148
62
—
10
which, Outside
210
(17)
(—)
(—)
(3)
Directors)
Auditors (of378—4which, Outside
45
(18)
(—)
(—)
(3)
Auditors)
Notes: 1. The amount of remuneration to Directors includes that for one (1) Director who retired at the conclusion of
the 95th Annual General Meeting of Shareholders held on June 25, 2021.
2. Bonuses for officers were paid to Directors and Auditors as performance-linked remuneration, etc.
The details of the performance benchmark selected for the calculation of performance-linked remunerationand the reason for the selection are described in 2) iii) above on page 25.
Profit attributable to owners of the parent for the fiscal year under review (96th term) was ¥11,368 million.
Until the previous fiscal year (95th term), the amounts of performance-linked remuneration was up to 2%of the aggregate amounts of dividends of surplus (up to the amounts of individual monthly fixed
remuneration for five months).
The changes in the aggregate amounts of dividends of surplus over time were as follows: ¥1,072 million in
the year ended March 31, 2019; ¥487 million in the year ended March 31, 2020; and ¥390 million in theyear ended March 31, 2021.
3. The Board of Directors’ meeting, held on May 22, 2006, resolved to abolish the retirement benefits systemfor officers, and the 80th Annual General Shareholders Meeting, held on June 29, 2006, resolved to grant
final payments in conjunction with the abolishment of the retirement benefits system. The total amount of
the final payments in the future as of the end of the fiscal year under review is as follows.
A total of 6 million yen for one Auditor
4. Outside Directors and Auditors do not receive officers’ remuneration, etc., from subsidiaries.

- 26 -

(4)Outside Directors and Auditors
1) Status of Activities at the Board of Directors During the Fiscal Year Under Review
Position at theCompanySignificant concurrent
positionsShinya Matsumoto

Director
Independent Officer

Outside Auditor, Impress
Holdings, Inc.
Outside Director, The
Shibusawa Warehouse Co.,Ltd.
Partner and Representative
Attorney, Marunouchi
Sogo Law Office

Hikari Imai

Director
Independent Officer

Outside Director,
CYBERDYNE Inc.

Yukari Sakai

Director
Independent Officer

Outside Director (Standing
Audit and Supervisory
Committee Member),
UNITED ARROWS LTD.

Name

- 27 -

Main activities and summary of duties
performed with respect to the role
expected of Outside Directors
Mr. Matsumoto attended 22 of the 23
Board of Directors meetings held
during the fiscal year under review,expressing opinions from theperspective of compliance with laws
and regulations based on his
professional perspective and broad
insight as an attorney. (Board of
Directors attendance rate: 95.7%)
In addition, by leveraging the abovementioned perspective and insight, heserves as the chairperson of theNomination and Compensation
Committee of the Company and isplaying an appropriate role inenhancing the fairness andtransparency of the Company’s Boardof Directors.
Mr. Imai attended 22 of the 23 Board of
Directors meetings held during the
fiscal year under review, expressing
opinions from the perspective ofenhancing and strengthening corporate
management, based on his extensive
experience as a corporate manager overmany years. (Board of Directors
attendance rate: 95.7%)
In addition, by leveraging the abovementioned experience, he serves as amember of the Nomination andCompensation Committee of theCompany and is playing an appropriaterole in enhancing the fairness andtransparency of the Company’s Boardof Directors.
Ms. Sakai attended 16 of the 16 Boardof Directors meetings held during the
fiscal year under review, expressing
opinions from the perspective ofenhancing and strengthening corporate
management, based on her extensive
experience as a corporate manager overmany years. (Board of Directors
attendance rate: 100.0%)
In addition, by leveraging the abovementioned experience, she is providing
advice, as appropriate, on various
issues related to the Company’s
corporate management based on avariety of perspectives from theviewpoint of diversity and is playing anappropriate role in enhancing theeffectiveness of the Company’s Boardof Directors.

2) Status of Activities at the Board of Auditors During the Fiscal Year Under Review
Name

Position at theCompanySignificant concurrent
positions

Main activities

Mr. Yasuda attended 23 of the 23 Boardof Directors meetings and 14 of the 14
Board of Auditors meetings held during
the fiscal year under review, expressing
AuditorKen Yasuda
opinions from the perspective of
Independent Officer
appropriate auditing, based on his
operational experience. (Board of
Directors attendance rate: 100%; Board
of Auditors attendance rate: 100%)
Mr. Ogata attended 23 of the 23 Boardof Directors meetings and 14 of the 14
Board of Auditors meetings held during
the fiscal year under review, expressing
Auditor
Hideki Ogata
opinions from the perspective of
Independent Officer
appropriate auditing, based on his
operational experience. (Board of
Directors attendance rate: 100%; Board
of Auditors attendance rate: 100%)
Mr. Ikeda attended 23 of the 23 Boardof Directors meetings and 14 of the 14
Board of Auditors meetings held during
the fiscal year under review, expressing
AuditorExternal Auditor, NIHON
Shuzo Ikeda
opinions from the perspective of
Independent Officer
PLAST CO., LTD.
appropriate auditing, based on his
operational experience. (Board of
Directors attendance rate: 100%; Board
of Auditors attendance rate: 100%)
Notes: 1. There are no transactional relationship or special interests between Directors Messrs. Shinya Matsumotoand Hikari Imai and Ms. Yukari Sakai and Auditors Messrs. Ken Yasuda, Hideki Ogata, and Shuzo Ikeda
and the Company.
2. There are no special interests between the corporations, etc. where Directors Messrs. Shinya Matsumoto and
Hikari Imai and Ms. Yukari Sakai and Auditor Mr. Shuzo Ikeda serve in concurrent positions and the Company.
3. Director Ms. Yukari Sakai’s attendance at meetings is for Board of Directors meetings held after she assumed
office on June 25, 2021.

- 28 -

5. Accounting Auditor(1)

Accounting Auditor’s Name
KPMG AZSA LLC(2)Amount of accounting auditor’s remuneration, etc. and reasons for the Board of Auditors tohave agreed on accounting auditor’s remuneration, etc. for the fiscal year under review
Category
Remuneration for the year ended March 31, 2022
Total amount of cash and other property interest payable by theCompany or its subsidiaries to Accounting Auditor

Amount paid
(Million yen)
38
38

Notes: 1. The audit agreement between the Company and the accounting auditor does not differentiate the amount ofaccounting auditor’s remuneration, etc. under the Companies Act from the amount of remuneration for the audit
under the Financial Instruments and Exchange Act. And as such differentiation is practically impossible, theamount of remuneration, etc. is presented as the total of these amounts.
2. No certified public accountant or audit firm other than the Company’s accounting auditor conducts audits ofthe financial statements of the Company’s consolidated subsidiaries.
3. Description of non-audit services
The Company has concluded a Procedural Work Contract Pursuant to Article 21, Paragraph 2, Item 3 of the
Enforcement Regulation of the Act on Special Measures Concerning Procurement of Electricity from
Renewable Energy Sources by Electricity Utilities (Ministry of Economy, Trade and Industry Ordinance No.
46) (October 2021), and pays ¥0 million as remuneration for the said contract.
4. Based on the Practical Guidelines for Collaboration with Accounting Auditors published by Japan Audit &Supervisory Board Members Association, the Board of Auditors has given consent to the remuneration, etc. tobe paid to the Accounting Auditor pursuant to Article 399, Paragraph 1 of the Companies Act as a result ofconfirming actual audit hours per audit item and grade in the auditing schedules of past years, trends inremuneration amounts, and the status of the execution of duties by the accounting auditor and examining thevalidity of auditing schedule and the remuneration amount for the fiscal year under review.

(3)

Policy on Determination of Dismissal or Non-reappointment of Accounting Auditor
The Company’s Board of Auditors shall dismiss the Accounting Auditor with the unanimous consent
of all Auditors if it is judged that the Accounting Auditor falls under any of the items set forth in
Article 340, Paragraph 1 of the Companies Act. In such an event, an Auditor selected by the Board
of Auditors shall report the dismissal of the Accounting Auditor and the reasons for that dismissal at
the first General Meeting of Shareholders convened after the dismissal.
The Board of Auditors shall decide on the reappointment or non-reappointment of the Accounting
Auditor taking into account factors such as the number of years of continuous provision of audits by
the Accounting Auditor.

6. Systems to Ensure the Appropriateness of the Company’s Business Operations andthe State of Their Implementation
(1)

(2)

(3)

System of retention and management of information concerning the execution of duties of the
Directors of the Company
1)
Reports related to the execution of duties of Directors are made in writing or in electronic
media.
2)
Information concerning the execution of duties of Directors is retained and managed
according to the document control rules and other internal rules of the Company.
Rules and other systems concerning the management of risk of loss of the Company
1)
In order to cope with major accidents, disasters, and corporate scandals, the Company
has established the Crisis Management Rules to clarify the positioning and functions of
the Crisis Response Committee which takes measures at normal times, and the Crisis
Response Headquarters which is established in emergency situations.
2)
Business management risks are presented to the Board of Directors to determine
countermeasures.
3)
Daily operational risks are handled by documenting management rules and businessexecution manuals, etc.
System to ensure the efficient execution of duties of the Directors of the Company and its
subsidiaries
1)
The Company has introduced an executive officer system to vitalize the Board of
Directors through clarifying that the role of the Board of Directors is to determine the- 29 -

2)

3)
4)

overall corporate management policies and supervise business execution. The Company
works to accelerate decision-making and enhance the business execution function at thepractical level through clarifying the roles and responsibilities of persons responsible forbusiness execution.
In the business operation of the Company, the Management Planning Committee,
consisting of Directors and the General Manager of the department in charge, formulates
operation policy and management plans. The Board of Directors discusses anddetermines the said policy and plans, and systematic and organizational execution ofbusiness is conducted based on the policy and plans. Executive Officers in charge
regularly report the progress of business execution to the Board of Directors forverification.
The Company has set basic rules and other matters concerning IT control in order toensure the efficiency of the business execution of the Company and its subsidiaries.
The Company has formulated rules and introduced a teleconference system between the
Hachinohe Head Office and the Tokyo Head Office in order to enable the participationof Outside Directors in all the Board of Directors’ meetings for decision-making.

(4)

System to ensure the execution of duties of Directors and employees of the Company incompliance with laws and regulations and the articles of incorporation of the Company
1)
The Board of Directors has set the Management Policy, the Corporate Code of Ethics,
and the Standard of Corporate Conduct, among others.
2)
The Company works to enhance compliance through establishing the Internal Control
Committee as a structure to ensure the execution of duties of the Directors and employees
in compliance with laws and regulations and the articles of incorporation of the Company.
3)
The Company eliminates any relationship with anti-social forces and other similar groups
that threaten the order and safety of civic society, and resolutely rejects any requests fromthem. The Company has already established a contact point, and centrally manages
information and always collaborates with the police, the Tokyo Metropolitan Police
Department’s Special Violence Prevention Measures Association (Tokubouren), andexternal expert institutions.
4)
The Company has introduced a teleconference system between the Hachinohe Head
Office and the Tokyo Head Office in order to enable the participation of Outside
Directors in all the Board of Directors’ meetings for decision-making.
5)
The Company has established the Internal Audit Dept. under the direct control of theBoard of Directors, and the department implements “organizational and system audits,”“operational audits,” “accounting audits,” and “daily monitoring” in collaboration with
Auditors.
6)
The Company has established a whistle-blowing system (internal and external contact
points) based on the Rules of Whistle-blowing System. Whistle-blowing reports are
submitted to the Board of Auditors, and specific cases are reported to the Board of
Directors.
Disadvantageous treatment of whistle-blowers as a result of whistle-blowing is
prohibited.

(5)

System to ensure the appropriateness of duties at the Group1)
The Company has established a system to ensure the appropriateness of duties ofsubsidiaries through assigning persons in charge of internal control and crisis
management at its subsidiaries under the guidance of the Company and making thepersons attend the Internal Control Committee and the Crisis Response Committee at theCompany as necessary.
2)
The Internal Audit Dept. of the Company implements audits in order to ensure theappropriateness of duties at consolidated subsidiaries.
3)
Directors of each consolidated subsidiary regularly report the operating conditions of theconsolidated subsidiary to the Board of Directors.
4)
The Company has established a whistle-blowing system (internal and external contact
points) based on the Rules of Whistle-blowing System. Whistle-blowing reports are
submitted to the Board of Auditors, and specific cases are reported to the Board of
Directors.
The whistle-blowing system covers matters concerning subsidiaries, associates, andbusiness partners, and other related entities. The Company ensures that thewhistleblowers will not receive disadvantageous treatment in association with such
- 30 -

internal reporting and prohibits such disadvantageous treatment.
(6)

System of employees to support the duties of Auditors of the Company
At the requests of Auditors, the Company may appoint employees belonging to the Internal
Audit Dept. as persons to support the duties of Auditors, in order to strengthen the collaboration
between Auditors and the Internal Audit Dept., and have the employees support Auditors to theextent that it does not negatively affect their primary duties. The Board of Directors exchanges
opinions with the Board of Auditors as needed.

(7)

System for Directors and employees of the Company to report to Auditors of the Company
1)
Directors of the Company immediately report to Auditors in accordance with laws andregulations, when they identify facts which may potentially cause substantial damage to
the Company.
2)
Directors of the Company allow Auditors to attend the Board of Directors’ meetings andother important meetings. Directors follow the instruction of Auditors with regard to theinspection of Auditors’ important documents and the investigation into the business andassets of the Company.
3)
As regards whistle-blowing reports to Auditors, employees, etc. of the Company,
directors, auditors, and employees, etc. of its subsidiaries, and those who have received
reports from them shall not be treated disadvantageously.
4)
The Company shall promptly process the prepayment and redemption of expenses
incurred in connection with the execution of duties of Auditors, expenses for the
execution of the said duties, and debt disposal.
5)
For the fair execution of duties of Directors of the Company, the Company enables all of
the four Auditors (of which three are Outside Auditors), including part-time Auditors, toattend all Board of Directors’ meetings.

(8)

System to ensure the reliability of financial reports of the Company
In order to ensure the reliability of financial reports of the Company and its subsidiaries, theCompany sets various related rules, identifies and manages the risks of causing fraud or error
in financial reports, designs, operates and evaluates prevention and monitoring functions, andcorrects deficiencies, if any.

(9)

Overview of the status of implementation of systems to ensure the appropriateness of theCompany’s business operations
1)
The Board of Directors met 23 times to decide on matters stipulated by laws andregulations, etc. and important matters concerning management. Communication among
the Directors is encouraged, and the Directors oversee the execution of each other’s
duties.
2)
The Board of Auditors met 14 times to discuss and decide audit policies and schedules
and to audit the Directors’ execution of their duties and the status of compliance withlaws and regulations, the articles of incorporation, etc.
3)
The Crisis Response Committee met 11 times to confirm the status of management ofrisks concerning the Company as a whole and activity policies for the following year,
deal with accidents, and conduct tsunami evacuation plans and training.
The Committee has also established a Crisis Management Manual for situations that are
anticipated to cause a material impact on management and is making efforts to establish
measures for dealing with such events and preventing them from happening.
4)
The Internal Control Committee met four times to evaluate the establishment of internal
control systems and the status of their implementation. It is also working to strengthen
compliance through regular confirmation of the status of compliance with laws andregulations and through education.
5)
Auditors and the internal audit division held four information exchange meetings andthey exchange information when necessary regarding internal audit results, etc.
Outside Directors also take part in these information exchanges.
6)
Whistle-blowing contact points have been established within and outside the Company
for reporting breaches of laws and regulations and internal rules, etc. They provide
thorough protection of whistleblowers and strive for the early detection and remediationof breaches, etc.

- 31 -

7. Policy Concerning Decisions on Distribution of Surplus, etc.
(1)

Dividend Policy
The Company considers the return of profits to shareholders to be an important management
issue and distributes dividends with the aim of a consolidated payout ratio of 30%, whileworking to enhance and strengthen the corporate structure.
The Company also positions internal reserves as a fund for responding functionally to changes
in the management environment and will use them for various purposes, including securingresources, the development of new technologies, capital expenditure, and the acquisition of treasury
shares as part of the Company’s capital policy.

(2)

Distribution of Surplus
Pursuant to Article 41 of the articles of incorporation, by resolution of the Board of Directors,
the Company decided on the distribution of surplus under Article 459, Paragraph 1 of theCompanies Act as follows.
Status of resolution by the Board of Directors on distribution of surplus according to the record
date belonging to the fiscal year under review
1) Total amount of dividends¥3,022 million
2) Dividend per share of common stock¥1553) Record date
March 31, 2022
As no interim dividend was issued, the annual dividend will be ¥175.

The amounts shown in this Business Report and the figures for the number of shares are rounded to theunit used for presentation.

- 32 -

Consolidated Balance Sheets(Million yen)

Description(Reference)
As of March
31, 2021(Reference)
As of March
31, 2021

As of March
31, 2022

Current liabilities

4,529

5,508

1,575

1,341

1,127

1,761

Income taxes payable

35

1,026

Provision for bonuses

258

444

Other

1,533

935

Non-current liabilities

3,941

4,190

571

122

1,266

2,077

654

631

33

5

28

34

1,377

1,306

9

11

8,470

9,699

64,90375,542

Share capital

13,922

13,922

Capital surplus

3,481

3,481

Retained earnings

47,95058,590

(449)

(450)

1,833

4,323

2,659

4,603

(37)

–

644

593

(1,108)

(969)

(325)

95

276

287

Total net assets

67,01480,153

Total liabilities and net assets

75,48489,852As of March
31, 2022

Description
Liabilities

AssetsCurrent assets

47,85357,882

Notes and accounts payable trade

Cash and deposits

21,48626,332

Accrued expenses

7,879

13,994

3,000

2,999

5,670

5,649

333

453

Raw materials and supplies

6,279

5,587

Other

3,206

2,867

(1)

(2)

27,631

31,970

7,606

7,734

2,758

2,592

69

115

Notes and accounts receivable- tradeSecurities
Merchandise and finished
goodsWork in process

Allowance for doubtful
accounts
Non-current assets
Property, plant andequipment
Buildings and structures
Machinery, equipment andvehicles

4,777

4,777

Other

1

248

Intangible assets

1

1

20,02324,234assetsInvestment securities
Other
Allowance for doubtful
accounts
Total assets

Deferred tax liabilities
Deferred tax liabilities forland revaluation
Provision for environmental
measures
Provision for loss on litigation
Provision for loss contract
Other
Total liabilities
Net assets
Shareholders’ equity

Land

Investments and other

Retirement benefit liability

Treasury shares
Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Deferred gains or losses onhedges
Revaluation reserve for land

19,59423,903

435

336

(5)

(5)

75,484Foreign currency translation
adjustment
Remeasurement of defined
benefit plans
Non-controlling interests

89,852- 33 -

Consolidated Statements of Income(Million yen)
(Reference) From April 1, 2020 From April 1, 2021 to March
to March 31, 2021
31, 2022

Description
Net sales

32,217

57,129

Cost of sales

30,056

48,962Gross profit

2,160

8,167

Selling, general and administrative expenses

2,654

3,360

Selling expenses

1,143

1,665

General and administrative expenses

1,510

1,694

Operating profit (loss)

(493)

4,806

Non-operating income

4,224

8,461

Interest income

58Dividend income

274

418

Rental income from real estate

109

103

3,539

6,483

Foreign exchange gains

113

1,311

Other

181

135

385

268

Interest expenses

00

Rental expenses on facilities

26

20

Commitment fees

27

27

Commission for syndicated loans

1190Foreign withholding tax

37

58

Settlement on contract

215

20

Other

66

50

3,344

12,9991

192

Gain on sale of non-current assets

10Gain on sale of investment securities–

192

Extraordinary losses

1,946

396

Impairment losses

1,896

317

Loss on retirement of non-current assets

47

78

Loss on sale of investment securities

1–

Profit before income taxes

1,399

12,795

Income taxes - current

370

1,462

Income taxes - deferred

(151)

(46)

Profit1,180

11,379

17

10

1,162

11,368

Share of profit of entities accounted for using equity method

Non-operating expenses

Ordinary profit
Extraordinary income

Profit attributable to non-controlling interests
Profit attributable to owners of parent- 34 -

Non-Consolidated Balance Sheets(Million yen)

Description(Reference)
As of March
31, 2021

Assets47,43757,413

Cash and deposits

21,03325,759Accounts receivable - trade

7,810

13,931

Securities

3,000

2,999

Merchandise

633

442

Finished goods

5,116

5,329

Raw materials

5,291

4,542

Work in process

337

462

Supplies

982

1,045

2,233

1,914

998

986

(0)

(0)

14,492

18,383

7,422

7,547

Buildings

2,639

2,450

Land

4,777

4,777

Other

5

318

Intangible assets

0

0

7,069

10,835

5,394

8,130

1,251

2,378

430

332

(5)

(5)

suppliers
Other
Allowance for doubtful
accounts
Non-current assets
Property, plant andequipment

Investments and otherassetsInvestment securities
Shares of subsidiaries andassociates
Other
Allowance for doubtful
accounts
Total assets

As of March
31, 2022

Current liabilities

4,488

5,390

Accounts payable - trade

1,586

1,350

Accounts payable - other

1,218

487

Accrued expenses

1,128

1,734

Income taxes payable

23

1,011

Provision for bonuses

234

412

Other

295

395

Non-current liabilities

3,463

4,080

Provision for retirement
benefits

286

180

Deferred tax liabilities

1,073

1,909

654

631

33

5

28

34

1,377

1,306

9

11

7,952

9,471

50,761

61,190Share capital

13,922

13,922

Capital surplus

3,481

3,481

3,481

3,481

33,80744,237

Legal retained earnings

382

382

Other retained earnings

33,42543,855General reserve

10,30010,300Retained earnings brought
forward23,12533,555

(449)

(450)

3,217

5,135

2,609

4,542

(37)

–

644

593

Total net assets

53,97866,325

Total liabilities and net assets

61,93075,797

Description

Liabilities

Current assets

Advance payments to(Reference)
As of March
31, 2021

As of March
31, 2022

Deferred tax liabilities forland revaluation
Provision for environmental
measures
Provision for loss on litigation
Provision for loss contract
Other
Total liabilities
Net assets

61,93075,797

Shareholders’ equity

Legal capital surplus
Retained earnings

Treasury shares
Valuation and translation
adjustments
Valuation difference on
available-for-sale securities
Deferred gains or losses onhedges
Revaluation reserve for land

- 35 -

Non-Consolidated Statements of Income(Million yen)
(Reference) From April 1, 2020 From April 1, 2021 to March
to March 31, 2021
31, 2022

Description
Net sales

31,601

56,527

Cost of sales

29,504

48,416Gross profit

2,096

8,110

Selling, general and administrative expenses

2,623

3,333

Selling expenses

1,206

1,734

General and administrative expenses

1,416

1,599

Operating profit (loss)

(526)

4,776

Non-operating income

4,185

8,275

5

8

3,794

6,734

Rental income from real estate

119

113

Foreign exchange gains

113

1,311

Other

152

106

385

268

Interest expenses

00

Rental expenses on facilities

26

20

Commitment fees

27

27

Commission for syndicated loans

1190Foreign withholding tax

37

58

Settlement on contract

215

20

Other

66

50

3,272

12,783

1

192

Gain on sale of non-current assets

10Gain on sale of investment securities–

192

Extraordinary losses

1,946

396

Impairment losses

1,896

317

Loss on retirement of non-current assets

47

78

Loss on sale of investment securities

1–

Profit before income taxes

1,327

12,579

Income taxes - current

354

1,442

Income taxes - deferred

(90)

(22)

1,064

11,159Interest income
Dividend income

Non-operating expenses

Ordinary profit
Extraordinary income

Profit- 36 -